Brazilians are familiar with the IOF (Tax on Financial Operations), as it is a tax levied on various financial transactions carried out in the country. It is regulated by the federal government and can vary according to the type of operation. In addition to foreign exchange transactions, the tax is applied to credit transactions, such as loans and financing, insurance, securities transactions, among others.
For 2024, an important update related to the IOF is the reduction in the rate from 5.38% to 4.38% on foreign exchange transactions. This decrease represents a change in financial conditions for Brazilians involved in foreign exchange transactions, making international operations potentially more accessible and less costly.
It is important to mention that this reduction is part of a timetable established by the government, as set out in Decree No. 11,153 of July 2022. According to this decree, the IOF rate on foreign exchange transactions will continue to decrease by one percentage point per year until 2028, when the tax will be abolished. This measure reflects commitments made by Brazil, in line with international guidelines, notably those stipulated by the Organization for Economic Cooperation and Development (OECD).
Initially set at 6.38%, the rate was reduced to 5.38% in 2023. In 2024, it was lowered to 4.38%, followed by a reduction to 3.38% in 2025. In subsequent years, the rate will continue to decrease, reaching 2.38% in 2026, 1.38% in 2027, and reaching 0% on January 2, 2028.
The change is especially positive for Brazilians who make purchases abroad. With the reduction in the tax on foreign exchange transactions, consumers who make international transactions, such as purchases in foreign currency with a credit card, will experience a reduction in the costs associated with these operations.
The progressive reduction in IOF rates over the years not only demonstrates the government’s strategy to strengthen Brazil’s international competitiveness, but also indicates financial relief for Brazilians who carry out transactions abroad. This change seeks to make international operations more accessible and attractive, directly benefiting consumers and fostering an environment conducive to global trade.
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